U.S. Ports' Agenda: Focus Is On Infrastructure

Ports are an integral part of our intermodal transportation and national defense systems. However, despite the enormous economic benefits resulting from their operations, too often ports are forgotten in the debate over national transportation infrastructure priorities. U.S. port infrastructure needs fall into three general categories: port cargo handling facilities, and waterside and landside access to those facilities. For ports, there has long been an obvious linkage between intermodal infrastructure needs.

However, federal policy has been slower to recognize that relationship. The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) was an important step, but has not lived up to its promise of making funding for freight projects a priority. The federal government needs to coordinate its programs and policies affecting intermodal freight transportation. Secretary of TransportationFederico Pena has provided inspired leadership and made progress at the Department of Transportation (DOT). But institutional gridlock in Congress, and other political and economic priorities at the federal, state and local levels present severe constraints. It is important to note that no matter how productive marine terminal facilities are, the U.S. port and intermodal transportation system cannot operate to maximum efficiency unless ports are accessible by ships on the waterside and cargo can move quickly and easily in or out of ports from the landside. Port Funding of Cargo Facilities Ports are, and historically have been, responsible for the development of cargo handling and related terminal facilities. According to the DOT, U.S. ports invested more than $12.5 billion from 1946 - 1992 on port and related shoreside transportation infrastructure and are expected to invest over $5.5 billion more by 1997. This reflects the continued commitment of the ports to modernize facilities in order to meet the growing demands of waterborne commerce in the highly competitive port industry.

During the 1990-92 time period, the financing methods used most often by ports for capital expenditures were port revenues, or retained earnings (39 percent of total expenditures); bonding authority using general obligation bonds (12.5 percent) and revenue bonds (28.9 percent); and state and local government grants, appropriations, etc.

(19.6 percent). Specialized general cargo facilities continue to account for nearly one-third of the current and projected expenditures. These statistics are based on a survey of AAPA members and are contained in the United States Port Development Expenditure Report, published in early 1994 by the Maritime Administration (MarAd), U.S. Department of Transportation.

According to the MarAd study, port revenues and revenue bonds are expected to be the predominant method of financing port infrastructure projects in the future. The growing dependence on port revenues for capital improvements intensifies the need for ports to be able to control their own financial future, minimizing the interference of cash-starved local and state governments. Waterside Access: The Need for a National Dredging Policy Waterside access to ports depends on the maintenance and periodic improvements to our deep-draft channel navigation system. Since 1986, non-federal sponsors have cost-shared new project costs. Since 1990 maintenance dredging has been 100 percent funded by an ad valorem tax on cargo paid by shippers out of the Harbor Maintenance Trust Fund. Ports also pay for dredging their own access channels and berths as well as for lands, easements, rights-of-way, and the increasing costs entailed by the construction of dredged material disposal sites.

Dredging is a central element of the development and operations of nearly every port in the U.S.; even ports with naturally deep federal channels often require some access channel maintenance dredging.

Over 400 million cubic yards of sediment are dredged every year, with three quarters of that total coming out of federal channels and the balance from access channels or berthside.

Oceangoing vessels move over 95 percent of U.S. international trade tonnage. If our harbors are to handle the increased trade volumes expected in the coming decades, ports need adequate depth in federal channels and berthing areas.

President Clinton recently expressed his support for ports and dredging in a letter to AAPA: "I am calling on federal agencies to redouble their efforts, and urge the state, local, port, environmental and other interested groups to continue their joint efforts to find solutions to these [dredging] problems. Our nation's ports are a key link in the nation's intermodal transportation chain, and your continued success and support will be crucial to achieving our goals." The President also acknowledged the significant economic contribution of ports, stating that, "The public port community will play a pivotal role as we expand export trading opportunities and create a truly global marketplace." However, dredging our nation's navigation channels to keep them open for trade is too often frustrated by inconsistent, complex and duplicative laws and regulations. One response to the ports' pleas for relief from the regulatory maze was from Transportation SecretaryFederico Pena, who established an Interagency Working Group on the Dredging Process composed of all federal agencies that have a regulatory role in the dredging process.

Led by the Maritime Administration, the Working Group includes: the Environmental Protection Agency (EPA), the U.S. Army Corps of Engineers, the Department of Commerce's National Marine Fisheries Service and the Department of the Interior's Fish and Wildlife Service. The Working Group has been in place since October 1993, and has held outreach sessions around the country to review problems with the dredging process. An options paper is now being finalized that will propose some solutions. The Working Group plans a second series of outreach meetings in May to review the options paper. The Working Group will report back to Secretary Pena this summer.

AAPA has developed a Proposal for a National Dredging Policy that goes well beyond the scope of the Interagency Working Group. AAPA is calling for adoption of a uniform national policy that recognizes the importance of efficient dredging operations to the nation's economy and security interests. Our proposal is intended to facilitate dredging the nation's harbors in a timely and cost-effective manner, consistent with environmental regulations.

More specifically, AAPA's National Dredging Policy calls on the Administration and Congress to direct that federal agencies work together to facilitate dredging projects and to amend the Clean Water Act (CWA) and Water Resources Development Act (WRDA) to provide for consistent management and disposal of dredged mate- rial, to streamline the federal permit process and establish a federal program for construction of disposal areas. In order to provide for implementation of the National Dredging Policy objectives, AAPA advocates the following legislative changes: • Establish a new section of the Clean Water Act, separate from the 404 wetlands provisions, for permitting of the discharge of dredged material from navigational dredging to EPA approved disposal areas, • Amend other provisions of the CWA to emphasize the prevention of pollution that may contaminate sediments and to require consideration of the use and value of the waters and channels to navigation in establishing appropriate criteria and standards, and • Establish a comprehensive program under WRDA, clarifying a federal responsibility for siting, construction and funding of confined and land-based disposal facilities for dredged material, in connection with construction of authorized federal navigation projects, that does not meet criteria for open water disposal. Port Landside Access Needs In addition to ensuring that navigation channels are clear and open for trade, there must be adequate access to the ports' cargo handling and terminal facilities from the landside. However, to assure adequate landside access, ports depend largely on federal government funding, funnelled through state and local government under the provisions of ISTEA.

ISTEA not only completely revamped our federal aid highway program, placing a new emphasis on intermodalism and freight transportation, but also specifically recognized the importance of access to seaports. The Act provided more authority for decision-making at the local level and added some flexibility in transferring funds between programs. Importantly, the language in ISTEA clearly recognized the national interest in an efficient freight transportation system as a critical factor in our country's ability to compete in the international marketplace, and assure competitive prices for U.S. consumers.

However, after two years it is clear that ISTEA is not living up to its promise to expand transportation planning and funding to meet national intermodal needs. Freight projects meeting national transportation needs are not receiving a fair allocation of funding through the local decision-making process. The expression "freight doesn't vote" sums up the political reality at the local level—the needs of passenger traffic are considered first, and there is little or no thought to providing access to intermodal facilities handling freight. During recent outreach meetings on ISTEA held by the Department of Transportation, participants clearly voiced the need to increase the focus on freight and afford it the priority it deserved. Following up those meetings, DOT included freight needs in its action plan. However, freight projects meeting national needs will not likely receive their fair share of federal aid unless and until the federal government directs state and local governments to do so. Secretary Pena's efforts to expand the National Highway System (NHS) into a National Transportation System (NTS) is a good step. However, in addition to that, AAPA recommends that Congress consider the following changes: • ISTEA should be made truly intermodal by allowing the use of all program funds for rail freight projects (currently, only Congestion Mitigation and Air Quality funds, which are limited, can be used for rail freight). Many worthwhile port rail freight access projects, for both rail bridges and double stack train access, have been rejected for funding because of current limitations.

• ISTEA should create a financial incentive to fund national need projects (particularly access to intermodal facilities) either through a separate funding source or a higher federal cost share for projects meeting certain criteria.

• The Administration should develop and support innovative financing ideas for transportation infrastructure projects.

Conclusion The federal/local port partnership that has, since our country's very beginning, successfully developed the nation's infrastructure in order to accommodate our waterborne commerce needs must now be reviewed and realigned. In an age of intermodalism and expanding global trading opportunities, there are significant pressures to successfully modernize and efficiently operate a truly seamless intermodal transportation system. Yet we also operate in a climate of environmental activism, increased political oversight at the local level, and fiscal austerity at all levels of government, each of which presents challenges at every turn, with the potential to derail our best efforts. For the ports and all who depend on them, our fundamental and longterm goal is to generate broad-based public awareness of, and support for, investment in freight-related transportation infrastructure.